Ligand could earn $100 million in deal with Chiva Pharma for China

US drugmaker Ligand Pharmaceuticals (Nasdaq: LGND) has entered into a strategic relationship with California-based Chiva Pharmaceuticals, an affiliate of Hainan Kaihua Pharmaceutical, to develop multiple Ligand assets and technology in China and potentially worldwide.

Chiva is being granted licenses to begin immediate development in China of Ligand’s two clinical-stage HepDirect programs, pradefovir for hepatitis B and MB01733 for hepatocellular carcinoma. Additionally, Ligand is granting Chiva a non-exclusive HepDirect technology license for the discovery, development and worldwide commercialization of new compounds in hepatitis B, hepatitis C and hepatocellular carcinoma.

Under the terms of the deal, Ligand has the potential to earn over $100 million in milestones and royalties on potential sales. In addition, Ligand has the potential to get a 10% equity position in Chiva and will also receive an undisclosed percentage of any sublicensing revenue generated from sublicensing of collaboration compounds to third parties in a major world market. Ligand is entitled to receive initial 2011 license payments that total $1 million.